Figure 9-4.The domestic country is Jamaica.
-Refer to Figure 9-4.Consumer surplus in Jamaica without trade is

Question

Figure 9-4.The domestic country is Jamaica. 
-Refer to Figure 9-4.Consumer surplus in Jamaica without trade is

Quizplus · Accepted Answer

In the absence of trade, consumer surplus in Jamaica is represented by the area above the price line and below the demand curve, up to the quantity of 5,000. This area is a triangle with base 5,000 and height (15 - 10) = 5. Therefore, consumer surplus is (1/2) x 5,000 x 5 = $12,500. Since the domestic price is $10 and consumers are willing to pay up to $15 for the good, the maximum amount that consumers are willing to pay for the whole quantity is 5,000 x 15 = $75,000. Thus, consumer surplus as a percentage of total expenditure is (12,500/75,000) x 100 = 16.67%. Therefore, the correct answer is C ($2,250).

Figure 9-4.The Domestic Country Is Jamaica